Electric car insurance: are electric vehicles expensive to insure?
In many ways electric cars are radically different from gasoline and diesel powered vehicles, but in others they are very familiar. As with any car, you need valid insurance coverage (at least third party level) to drive it legally on public roads.
Insurance is an unavoidable and often irritating expense for all motorists – electric or otherwise – but there’s no doubt that it’s worth paying for. Regardless of legal requirement, there are over 180,000 incidents a year on UK roads, so the chances of being involved in a scrape may be higher than you think.
These days, traditional insurance companies have no problem covering electric cars, quoting for them in exactly the same way as they would for a combustion engine model. However, depending on the car, you may find slightly higher premiums than for an equivalent petrol or diesel car. Here we look at why this may be, as well as ways to minimize your premium.
Are electric cars more expensive to insure?
According to Martin Smith, technical claims manager for insurance company Aviva, there is nothing about electric cars that makes them inherently more expensive to insure. Ultimately, it’s still a four-wheeled vehicle with an engine powered by a human driver – and it’s the human driver’s record and claim history, along with other factors like expected annual mileage, usage and location, which have the biggest impact on the insurance premium you pay.
Nevertheless, electric cars can still be more expensive to insure than their directly comparable petrol or diesel counterparts. In 2017, a study by price comparison website Comparethemarket found that some electric cars could cost up to 45% more to insure than their conventional counterparts at the time.
However, the situation seems to have improved; more recent figures show that the gap is narrowing. Another comparison site, GoCompare, said the average cost of an electric car insurance policy (all risks) was £470.57, slightly more than the overall average of £458.
Insurer LV released data in early 2021 which showed that in some cases it is cheaper to insure an electric model, and in other cases it can cost around 10% more. According to LV, a Renault ZOE was on average 8% cheaper to insure than a Renault Clio (£287 vs. £311), while a Nissan Leaf was only 8% (or £23) more expensive to cover than a Nissan Micra (£301 vs £278). Similarly, premiums for a Hyundai Kona (£299 electric vs £283 petrol) and Kia Niro (£307 electric vs £289 petrol) were found to be 6% higher than combustion equivalents.
The difference between premiums for electric and combustion engine vehicles may be greater for young drivers. According to an April 2021 study by BookMyGarage.com, quotes for a 22-year-old on an electric car were on average 20% higher than for gasoline and hybrid models, compared to just 10% higher for a 22-year-old. 35 years.
Why can electric cars be more expensive to insure?
While electric cars have fewer moving parts than gasoline and diesel cars, some components like lithium-ion batteries are very expensive to repair if damaged. Insurers take this into account when calculating premiums.
According to Jonathan Hewett, managing director of Thatcham Research: “When it comes to electric vehicles, the insurance industry – and the car industry – have relatively little experience. Product development must include design for the repair, with properly trained and equipped repair technicians not only in the car manufacturers’ own networks but also in the independent repair sector.
“And if the cost of batteries drops, it still represents up to 40% of the cost of the vehicle, so everything must be done to prevent the current lack of battery repairability from translating into a relatively minor shunt resulting in the deregistration of the vehicle by the insurers.
“In an ideal world, automakers would consider ways in which body repairers could work safely on vehicles equipped with high-voltage systems, without those repairers needing to use specialized and proprietary diagnostic equipment. The goal should be an EV customer experience that matches or betters expectations shaped by the long-established combustion engine ecosystem – but that can only be achieved through collaboration between automakers, the repair industry independent and insurers.”
Our sister title Auto Express has reported that only a fraction of UK mechanics are qualified to work on electric cars. Between 13,000 and 20,000 technicians are qualified, or about 5% of the total. Steve Nash, CEO of the Institute of the Motor Industry (IMI), said more than eight in 10 independent garages were struggling to recruit qualified technicians to work on electric and hybrid cars.
However, despite these problems, insurance premiums for electric cars are expected to gradually decline. As automakers find ways to cut production costs and the number of qualified technicians grows, electric car drivers are set to enjoy lower premiums in the future. The situation has improved somewhat since the 2016 survey mentioned above; As a guide to electric car repairs and maintenance, you can use the Hybrid and Electric Vehicle Repair Alliance (HEVRA) website to find a local qualified mechanic.
According to Aviva’s Martin Smith, as the technology and skills needed to repair electric cars become more widespread, the effect of these factors on electric car insurance will lessen. “Essentially, there’s nothing unique to electric cars that makes them more expensive to insure,” he says. “They’re like any other car. If it’s very expensive or has a lot of technology, those are things that can contribute to a higher premium.”
What to tell your insurer if you own an electric car
There are a couple of things you should tell the insurer before buying the policy. Most important is whether or not you have a battery lease on the car. If you rent the battery separately, you must inform your supplier to avoid any problems if you should make a claim.
It’s worth mentioning, however, that battery leasing is very rare these days, as early concerns about the long-term lifespan of electric car batteries have largely been allayed, but you may need to consider that. if you bought an old used electric car. Another point to consider is where you will charge the car. If you regularly charge it at home, but the charging cord is on a public trail, you have a duty of care to members of the public to prevent them from tripping and injuring themselves on the cord.
However, you don’t necessarily need a specialized electric car insurance policy to account for these factors. As Aviva’s Martin Smith says, “An electric vehicle policy will likely cover you for a travel event, but your standard car insurance policy will also provide that coverage.”
How can I reduce my electric car insurance?
There are several ways to reduce your premium on an electric car. The first is to find the best deal. Comparison sites are a good start, but not all insurers – especially specialist providers – are listed. That’s why it’s also worth considering using an insurance broker.
Paying your premium all at once will be cheaper than opting for monthly installments, as these often include interest charges. You should also consider installing a “black box” – a telematics device – in your car. These monitor driving behavior, such as how fast you’re going, whether you’re braking and accelerating aggressively and your cornering speeds. Good behavior is rewarded with cheaper premiums, with drivers saving up to 20% compared to normal policies.
Finally, you might consider a dash cam. These are small cameras installed on the dashboard, continuously recording what is happening in front of the car. If an accident were to occur, this could prove crucial in proving who was to blame and whether or not your insurer will pay. Some providers offer discounts of up to 20% to dash cam users, but be sure to contact your provider and ask if they offer dash cam discounts before purchasing one.